UK Industrial Strategy Commission Calls for Good Universal Broadband

The independent Industrial Strategy Commission has today published their final report, which calls for all UK citizens to be given access to ‘Universal Basic Infrastructure‘ so that everybody can benefit from good quality rail, energy, water, flood defences, broadband and mobile connectivity.

The commission argues that the Government needs to completely overhaul how it views industrial strategy, which it says must support a broad, long-term and non-partisan commitment to strategic management of the economy. However, expecting such a divided parliament to agree a non-partisan approach probably stands about as much chance of succeeding as telling Donald Trump to stop Tweeting nonsense.

Dame Kate Barker, Chair of the Commission, said:

“The UK’s people, places and industries have great strengths and untapped potential, but we must accept the reality that the economy also contains many long-established weaknesses.

Industrial strategy needs to be embraced as a long-term plan to manage the economy strategically and embedded throughout government. If we get the new strategy right it can build on these strengths, tackle our weaknesses and above all have a positive, long-lasting impact on people’s everyday lives. This implies that sometimes it will be right to choose equity and long-term-gains over short-term efficiency.”

The report says that in the rural and coastal peripheries, places like Lowestoft should benefit from the commitment to a Universal Basic Infrastructure. The primary justification for a UBI is fairness and national solidarity, but it notes that there would be economic benefits too.

According to the commission, a focus on modern infrastructure promoting connectivity, such as “fibre broadband“, will help new and existing businesses, while the UBI would guarantee the quality of public services like health and social care to citizens. “Improvements in productivity in this sector would both benefit these individual places and have an impact on the UK’s overall productivity,” said the ISC.

However there’s woefully little detail on the ISC’s practical expectations for broadband and mobile connectivity. Simply calling for better services – without clarifying what kind of connectivity you want, where the funding would come from or who would deliver it – does little to clarify whether this would be any different from the currently proposed 10Mbps Universal Service Obligation (USO).

Th USO is expected to be delivered by Openreach (BT) and would also focus on the final 2% of premises in more remote rural areas (details), which sounds a lot like what the ISC want.

Universal Basic Infrastructure (Report Extract)

The challenge to ensure there is adequate investment in our infrastructure is significant. As infrastructure investment is long-term, it is an area of economic strategy that sits least comfortably with short-term political ambitions and pressures.

In addition to the needs of new technologies, there are several areas where the UK’s existing ‘hard’ infrastructure is acknowledged either to be weak or to need significant investment in the next 10-20 years, including:

• Rail
• Energy
• Water and flood defence
• Fixed and mobile broadband and fibre

There are specific infrastructure needs associated with investment in new technologies and their diffusion. This includes electric and autonomous vehicles, but more broadly the UK’s lamentable fixed and mobile broadband infrastructure. As Professor Dieter Helm has commented, ‘Few would locate in Britain because of the attractiveness of its existing network infrastructures. Few will be attracted by the state of its broadband.’

The physical and natural capital infrastructure map needs rethinking in terms of both looming challenges, such as climate change and dangerous air quality, or ageing; and also in terms of existing weaknesses such as low productivity outside London and the South East.

The report also notes that the UK’s “regulatory landscape is unsatisfactory” and calls for a change. It states that the regulation of the natural monopoly utilities is “vulnerable to frequent political interventions” and some of the sectors governed by these regulators “have among the most dismal productivity records in the economy“.

“With two exceptions [media and financial services], these sector-focused bodies (including telecoms and broadband) should be replaced with a horizontal regulator – especially as the market and technological landscape is changing in many of these sectors,” said the ISC (whatever that actually means?). No doubt Ofcom would disagree.

The Government’s Business Secretary, Greg Clark MP, has welcomed the report and said he “shares its ambition … we will carefully consider their contribution to this important work.”